Centers for Medicare & Medicaid Services Center for Medicare and Medicaid Innovation Seamless Care Models Group 7205 Windsor Blvd Baltimore, MD 21244 Next Generation ACO Model Participation Agreement (First Amended and Restated Participation Agreement for 2016 Starters) Last Modified: December 21, 2016
Table of Contents I. Agreement Term and Renewal... 7 II. Definitions... 7 III. ACO Composition... 12 A. ACO Legal Entity... 12 B. ACO Governance... 13 1. General... 13 2. Composition and Control of the Governing Body... 13 3. Conflict of Interest... 14 C. ACO Leadership and Management... 14 D. ACO Financial Arrangements... 15 IV. Next Generation Participants and Preferred Providers... 17 A. General... 17 B. Initial Next Generation Participant List... 18 C. Initial Preferred Provider List... 18 D. Updating Lists During the Performance Year... 19 1. Additions to a List... 19 2. Removals from a List... 20 3. Updating Enrollment Information... 21 E. Annual Updates to Participant List and Preferred Provider List... 21 1. Proposed Participant and Preferred Provider Lists... 21 2. ACO Notice to Proposed Participants... 21 3. ACO Notice to TINs... 21 4. Review, Certification, and Finalization of the Participant List and Preferred Provider List... 22 F. Non-Duplication and Exclusivity of Participation... 23 V. Beneficiary Alignment, Engagement, and Protections... 23 A. Beneficiary Alignment... 23 B. Alignment Minimum... 24 C. Voluntary Alignment... 24 1. General... 24 1
2. Influencing or Attempting to Influence the Beneficiary... 24 3. Enforcement... 25 4. Modification or Elimination of Voluntary Alignment... 25 D. Beneficiary Notifications... 25 E. Descriptive ACO Materials and Activities... 25 F. Availability of Services... 26 G. Beneficiary Freedom of Choice... 26 H. Prohibition on Beneficiary Inducements... 26 1. General Prohibition... 26 2. Exception... 27 I. HIPAA Requirements... 27 VI. Data Sharing and Reports... 27 A. General... 27 B. Provision of Certain Claims Data... 28 D. Beneficiary Rights to Opt Out of Data Sharing... 31 E. Beneficiary Substance Abuse Data Opt-In... 32 F. Certification of Data and Information... 33 VII. Care Improvement Objectives... 33 A. General... 33 B. Outcomes-Based Contracts with Other Purchasers... 34 VIII. ACO Quality Performance... 34 A. Quality Scores... 34 B. Quality Measures... 34 C. Quality Measure Reporting... 35 D. Quality Performance Scoring... 35 IX. Use of Certified EHR Technology... 36 X. ACO Selections and Approval... 36 A. ACO Selections... 36 B. Risk Arrangement and Savings/Loss Cap Approval... 36 C. Alternative Payment Mechanism Approval... 36 XI. Benefit Enhancements... 36 2
A. General... 37 B. 3-Day SNF Rule Waiver Benefit Enhancement... 37 C. Telehealth Expansion... 38 D. Post-Discharge Home Visits... 38 E. Requirements for Termination of Benefit Enhancements... 39 F. Termination of Benefit Enhancements upon Termination... 39 XII. Coordinated Care Reward... 39 A. Reward Payment... 39 B. ACO Obligations and Limitations Regarding the Coordinated Care Reward... 39 XIII. ACO Benchmark... 40 A. Prospective Benchmark... 40 B. Trend Adjustments... 41 XIV. Payment... 41 A. General... 41 B. Alternative Payment Mechanisms... 41 1. General... 41 2. Infrastructure Payments... 42 3. Population-Based Payments (PBP)... 42 4. All-Inclusive Population-Based Payments (AIPBP)... 43 C. Settlement... 43 1. General... 43 2. Error Notice... 43 3. Deferred Settlement... 44 4. Settlement Reopening... 44 5. Payment of Amounts Owed... 44 6. Transition from the ACO Investment Model (AIM)... 45 D. Financial Guarantee... 45 E. Delinquent Debt... 45 XV. Participation in Evaluation, Shared Learning Activities, and Site Visits... 46 A. Evaluation Requirement... 46 1. General... 46 3
2. Primary Data... 46 3. Secondary Data... 46 B. Shared Learning Activities... 47 C. Site Visits... 47 D. Rights in Data and Intellectual Property... 47 XVI. Public Reporting and Release of Information... 48 A. ACO Public Reporting and Transparency... 48 B. ACO Release of Information... 49 XVII. Compliance and Oversight... 49 A. ACO Compliance Plan... 49 B. CMS Monitoring and Oversight Activities... 49 C. ACO Compliance with Monitoring and Oversight Activities... 50 D. Compliance with Laws... 50 1. Agreement to Comply... 50 2. State Recognition... 51 3. Reservation of Rights... 51 4. Office of Inspector General of the Department of Health and Human Services (OIG) Authority... 51 5. Other Government Authority... 51 XVIII. Audits and Record Retention... 52 A. Right to Audit and Correction... 52 B. Maintenance of Records... 52 XIX. Remedial Action and Termination... 53 A. Remedial Action... 53 B. Termination of Agreement by CMS... 55 C. Termination of Agreement by ACO... 56 D. Financial Settlement upon Termination... 56 E. Notifications to Participants, Preferred Providers, and Beneficiaries upon Termination. 56 XX. Limitation on Review and Dispute Resolution... 57 A. Limitations on Review... 57 B. Dispute Resolution... 58 4
1. Right to Reconsideration... 58 2. Standards for reconsideration.... 58 3. Reconsideration determination.... 59 XXI. Miscellaneous... 59 A. Agency Notifications and Submission of Reports... 59 B. Notice of Bankruptcy... 60 C. Severability... 60 D. Entire Agreement; Amendment... 60 E. Survival... 60 F. Precedence... 61 G. Change of ACO Name... 61 H. Prohibition on Assignment... 61 I. Change in Control... 61 J. Certification... 62 K. Execution in Counterpart... 62 5
AMENDED AND RESTATED PARTICIPATION AGREEMENT This first amended and restated participation agreement is between the CENTERS FOR MEDICARE & MEDICAID SERVICES ( CMS ) and _V125 Trinity Health ACO_, an accountable care organization ( ACO ). CMS is the agency within the U.S. Department of Health and Human Services ( HHS ) that is charged with administering the Medicare and Medicaid programs. The ACO is an entity that has been approved by CMS to operate a Medicare accountable care organization ( Medicare ACO ). A Medicare ACO is an entity formed by certain health care providers that accepts financial accountability for the overall quality and cost of medical care furnished to Medicare fee-for-service beneficiaries assigned to the entity. Typically, the health care providers participating in a Medicare ACO continue to bill Medicare under the traditional fee-for-service system for services rendered to Beneficiaries. However, the Medicare ACO may share in any Medicare savings achieved with respect to the aligned beneficiary population if the Medicare ACO satisfies minimum quality performance standards. The Medicare ACO may also share in any Medicare losses recognized with respect to the aligned beneficiary population. Medicare ACOs participating in a two-sided risk model are liable to CMS for a portion of the Medicare expenditures that exceed a benchmark. CMS is implementing the Next Generation ACO Model ( Model ) under section 1115A of the Social Security Act ( Act ), which authorizes CMS, through its Center for Medicare and Medicaid Innovation, to test innovative payment and service delivery models that have the potential to reduce Medicare, Medicaid, or Children s Health Insurance Program expenditures while maintaining or improving the quality of beneficiaries care. The purpose of the Next Generation ACO Model is to test an alternative Medicare ACO payment model. Specifically, this model will test whether health outcomes improve and Medicare Parts A and B expenditures for Medicare fee-for-service beneficiaries decrease if Medicare ACOs (1) accept a higher level of financial risk compared to existing Medicare ACO payment models, and (2) are permitted to select certain innovative Medicare payment arrangements and to offer certain additional benefit enhancements to their assigned Medicare fee-for-service beneficiaries. The ACO submitted an application to participate in the Next Generation ACO Model, and CMS has approved the ACO for participation in the model. In December 2015, the parties executed a participation agreement governing their rights and obligations under the Model ( Agreement ). CMS wishes to amend the terms of the Agreement to incorporate All-Inclusive Performance-Based Payments, streamline data sharing requirements, refine certain requirements regarding the Participant List and the Preferred Provider List, and make various other amendments. The parties therefore amend and restate the Agreement as follows: 6
I. Agreement Term and Renewal II. A. The Agreement became effective when it was signed by both parties (the Effective Date ). The amendments hereby made to the Agreement will be effective as of January 1, 2017. The Agreement will conclude at the end of the third Performance Year (the Initial Term ) or at the end of a renewal period, unless sooner terminated by either party in accordance with Section XIX. B. The first Performance Year of the Agreement began on January 1, 2016 (the Start Date ) and ended on December 31, 2016. Subsequent Performance Years shall each be 12 months in duration, beginning on January 1. C. CMS may offer to renew the Agreement for a renewal period of an additional two Performance Years. In deciding whether to offer to renew this Agreement, CMS may consider the ACO s actual spending in relation to the Performance Year Benchmark; the ACO s quality score performance; the ACO s history of compliance with the terms of this Agreement and Medicare program requirements; the results of a program integrity screening of the ACO, its Next Generation Participants, and its Next Generation Professionals; the ACO s ability to repay in full any Shared Losses and Other Monies Owed; and such other criteria CMS deems relevant. If CMS offers to renew this Agreement, CMS shall make a written offer to renew the Agreement at least 60 days before the expiration of the Initial Term. The ACO shall accept or reject such offer in writing by a date and in a manner specified by CMS. Definitions ACO Activities means activities related to promoting accountability for the quality, cost, and overall care for a patient population of aligned Medicare fee-for-service Beneficiaries, including managing and coordinating care for Next Generation Beneficiaries; encouraging investment in infrastructure and redesigned care processes for high quality and efficient service delivery; or carrying out any other obligation or duty of the ACO under this Agreement. Examples of these activities include, but are not limited to, providing direct patient care to Next Generation Beneficiaries in a manner that reduces costs and improves quality; promoting evidence-based medicine and patient engagement; reporting on quality and cost measures under this Agreement; coordinating care for Next Generation Beneficiaries, such as through the use of telehealth, remote patient monitoring, and other enabling technologies; establishing and improving clinical and administrative systems for the ACO; meeting the quality performance standards of this Agreement; evaluating health needs of Next Generation Beneficiaries; communicating clinical knowledge and evidence-based medicine to Next Generation Beneficiaries; and developing standards for Beneficiary access and communication, including Beneficiary access to medical records. AIPBP means the all-inclusive population-based payment Alternative Payment Mechanism in which CMS makes a monthly payment to the ACO reflecting an estimate, based on historical expenditures, of the percentage of total expected Medicare Part A and/or Part B FFS payments for Covered Services furnished to Next Generation Beneficiaries by Next Generation Participants and Preferred Providers who have agreed to receive AIPBP Fee Reduction. 7
AIPBP Fee Reduction means the 100% reduction in Medicare FFS payments to selected Next Generation Participants and Preferred Providers, who have agreed to receive no payment from Medicare for Covered Services furnished to Next Generation Beneficiaries to account for the Monthly AIPBP Payments made by CMS to the ACO under AIPBP. Alternative Payment Mechanism means an optional payment mechanism that may be selected by the ACO for a given Performance Year, under which CMS will make interim payments to the ACO during a Performance Year. The three Alternative Payment Mechanisms available for selection are Infrastructure Payments, PBP, and AIPBP. At-Risk Beneficiary means a Beneficiary who A. Has a high risk score on the CMS-Hierarchical Condition Category (HCC) risk adjustment model; B. Is considered high cost due to having two or more hospitalizations or emergency room visits each year; C. Is dually eligible for Medicare and Medicaid; D. Has a high utilization pattern; E. Has one or more chronic conditions; F. Has had a recent diagnosis that is expected to result in increased cost G. Is entitled to Medicaid because of disability; H. Is diagnosed with a mental health or substance abuse disorder; or I. Meets such other criteria as specified in writing by CMS. Beneficiary means an individual who is enrolled in Medicare. Benefit Enhancements means the following additional benefits the ACO chooses to make available to Next Generation Beneficiaries through Next Generation Participants and Preferred Providers in order to support high-value services and allow the ACO to more effectively manage the care of Next Generation Beneficiaries: (1) 3-Day SNF Rule Waiver (as described in Section XI.B and Appendix I; (2) Telehealth Expansion (as described in Section XI.C and Appendix J); and (3) Post-Discharge Home Visits (as described in Section XI.D and Appendix K). CCN means a CMS Certification Number. Coordinated Care Reward means payment from CMS to a Beneficiary to reward the Beneficiary for receiving qualifying services from Next Generation Participants and Preferred Providers in an ACO when the Beneficiary was a Next Generation Beneficiary aligned to that ACO. Covered Services means the scope of health care benefits described in sections 1812 and 1832 of the Act for which payment is available under Part A or Part B of Title XVIII of the Act. Days means calendar days unless otherwise specified. Descriptive ACO Materials and Activities include, but are not limited to, general audience materials such as brochures, advertisements, outreach events, letters to Beneficiaries, web pages, mailings, social media, or other activities conducted by or on behalf of the ACO or its Next 8
Generation Participants or Preferred Providers, when used to educate, notify, or contact Beneficiaries regarding the Next Generation ACO Model. The following communications are not Descriptive ACO Materials and Activities: communications that do not directly or indirectly reference the Next Generation ACO Model (for example, information about care coordination generally would not be considered Descriptive ACO Materials and Activities); materials that cover Beneficiary-specific billing and claims issues; educational information on specific medical conditions; referrals for health care items and services; and any other materials that are excepted from the definition of marketing under the HIPAA Privacy Rule (45 CFR Part 160 & Part 164, subparts A & E). FFS means fee-for-service. Infrastructure Payments means the Alternative Payment Mechanism under which CMS makes monthly per-next Generation Beneficiary payments to the ACO to support ACO Activities. Legacy TIN means a TIN that a Next Generation Participant or Preferred Provider previously used for billing Medicare Parts A and B services but no longer uses to bill for those services, and includes a sunsetted Legacy TIN (a TIN that is no longer used for billing for Medicare Parts A and B services by any Medicare-enrolled provider or supplier) or an active Legacy TIN (a TIN that may be in use by a Medicare-enrolled provider or supplier that is not a Next Generation Participant or Preferred Provider). Medically Necessary means reasonable and necessary as determined in accordance with section 1862(a) of the Act. Monthly AIPBP Payment means the monthly payment made by CMS to an ACO under AIPBP. Monthly PBP Payment means the monthly payment made by CMS to an ACO under PBP. Next Generation Beneficiary means a Beneficiary who is aligned to the ACO for a given Performance Year using the methodology set forth in Appendix B and has not subsequently been excluded from the aligned population of the ACO. Next Generation Participant means an individual or entity that: A. Is a Medicare-enrolled provider (as defined at 42 CFR 400.202) or supplier (as defined at 42 CFR 400.202); B. Is identified on the Participant List in accordance with Section IV; C. Bills for items and services it furnishes to Beneficiaries under a Medicare billing number assigned to a TIN in accordance with applicable Medicare regulations; D. Is not a Preferred Provider; E. Is not a Prohibited Participant; and F. Pursuant to a written agreement with the ACO, has agreed to participate in the Model, to report quality data through the ACO, and to comply with care improvement objectives and Model quality performance standards. Next Generation Professional means a Next Generation Participant who is either: 9
A. A physician (as defined in section 1861(r) of the Act); or B. One of the following non-physician practitioners: 1. Physician assistant who satisfies the qualifications set forth at 42 CFR 410.74(a)(2)(i)-(ii); 2. Nurse practitioner who satisfies the qualifications set forth at 42 CFR 410.75(b); 3. Clinical nurse specialist who satisfies the qualifications set forth at 42 CFR 410.76(b); 4. Certified registered nurse anesthetist (as defined at 42 CFR 410.69(b)); 5. Certified nurse midwife who satisfies the qualifications set forth at 42 CFR 410.77(a); 6. Clinical psychologist (as defined at 42 CFR 410.71(d)); 7. Clinical social worker (as defined at 42 CFR 410.73(a)); or 8. Registered dietician or nutrition professional (as defined at 42 CFR 410.134). NPI means a national provider identifier. Other Monies Owed means a monetary amount owed by either party that represents a reconciliation of monthly payments made by CMS during a Performance Year, including payments made through Alternative Payment Mechanisms, and is neither Shared Savings nor Shared Losses. Such calculations shall be made in accordance with Appendix B and reconciliation shall be performed pursuant to Section XIV.B. Participant List means the list that identifies each Next Generation Participant that is approved by CMS for participation in the Next Generation Model, specifies which Next Generation Participants, if any, have agreed to receive an AIPBP Fee Reduction or PBP Fee Reduction, and designates the Benefit Enhancements, if any, in which each Next Generation Participant participates, as updated from time to time in accordance with Sections IV.D and IV.E of this Agreement. PBP means the population-based payment Alternative Payment Mechanism in which CMS makes a Monthly PBP Payment to the ACO reflecting an estimate, based on historical expenditures, of the percentage of total expected Medicare Part A and/or Part B FFS payments for Covered Services furnished to Next Generation Beneficiaries by Next Generation Participants and Preferred Providers who have agreed to receive a PBP Fee Reduction. PBP Fee Reduction means a partial reduction in Medicare FFS payments to selected Next Generation Participants and Preferred Providers who have agreed to receive such reduced payments for Covered Services furnished to Next Generation Beneficiaries to account for the Monthly PBP Payments made by CMS to the ACO under PBP. Performance Year means the 12-month period beginning on January 1 of each year during the term of the Agreement. Performance Year Benchmark means the target expenditure amount to which actual Medicare Part A and Part B expenditures for Next Generation Beneficiaries during a 10
Performance Year will be compared in order to calculate Shared Losses and Shared Savings as determined by CMS in accordance with Appendix B. Preferred Provider means an individual or entity that: A. Is a Medicare-enrolled provider (as defined at 42 CFR 400.202) or supplier (as defined at 42 CFR 400.202); B. Is identified on the Preferred Provider List in accordance with Section IV; C. Bills for items and services it furnishes to Beneficiaries under a Medicare billing number assigned to a TIN in accordance with applicable Medicare regulations; D. Is not a Next Generation Participant; E. Is not a Prohibited Participant; and F. Has agreed to participate in the Model pursuant to a written agreement with the ACO. Preferred Provider List means the list that identifies each Preferred Provider that is approved by CMS for participation in the Next Generation Model, specifies which Preferred Providers, if any, have agreed to receive an AIPBP Fee Reduction or PBP Fee Reduction, and designates the Benefit Enhancements, if any, in which each Preferred Provider participates, as updated from time to time in accordance with Section IV of this Agreement. Prohibited Participant means an individual or entity that is: (1) a Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) supplier, (2) an ambulance supplier, (3) a drug or device manufacturer, or (4) excluded or otherwise prohibited from participation in Medicare or Medicaid. Reduced FFS Payment means the applicable Medicare FFS payment for Covered Services furnished by Next Generation Participants or Preferred Providers to Next Generation Beneficiaries, less the applicable AIPBP Fee Reduction or PBP Fee Reduction. Risk Arrangement means the arrangement selected by the ACO that determines the portion of the savings or losses in relation to the Performance Year Benchmark that accrue to the ACO as Shared Savings or Shared Losses. Rural ACO means an ACO in this Model for which at least 40 percent of the Federal Information Processing Standard (FIPS) codes in its service area are determined to be rural according to the definition used by the Health Resources and Services Administration (HRSA) Office of Rural Health Policy. Such definition includes all non-metropolitan counties, census tracts inside Metropolitan counties with Rural-Urban Commuting Area (RUCA) codes 4-10, and census tracts with RUCA codes 2 or 3 that are at least 400 square miles in area with a population density of no more than 35 people per square mile. Savings/Losses Cap means the maximum percentage of Shared Savings or Shared Losses that will be paid to or owed by the ACO, as selected by the ACO in accordance with Section X.A.2. and based upon the ACO s Performance Year Benchmark (i.e., if the ACO elects a 5% Savings/Losses Cap, the ACO would only share in savings up to 5% of its Performance Year Benchmark, even if it achieved savings equal to 6% of that Performance Year Benchmark and elected a 100% savings risk arrangement). 11
Shared Losses means the monetary amount owed to CMS by the ACO in accordance with the applicable Risk Arrangement and Appendix B due to expenditures for Medicare Part A and B items and services furnished to Next Generation Beneficiaries in excess of the Performance Year Benchmark. Shared Savings means the monetary amount owed to the ACO by CMS in accordance with the applicable Risk Arrangement and Appendix B due to expenditures for Medicare Part A and B items and services furnished to Next Generation Beneficiaries lower than the Performance Year Benchmark. TIN means a federal taxpayer identification number. Voluntary Alignment means the process by which Beneficiaries may voluntary align to the ACO as described in Section V.C and Appendix C. Voluntary Alignment Form has the meaning set forth in Appendix C. III. ACO Composition A. ACO Legal Entity 1. The ACO shall be a legal entity identified by a TIN formed under applicable state, federal, or tribal law, and authorized to conduct business in each state in which it operates for purposes of the following: (a) Receiving and distributing Shared Savings; (b) Repaying Shared Losses or Other Monies Owed to CMS; (c) Establishing, reporting, and ensuring Next Generation Participant compliance with health care quality criteria, including quality performance standards; and (d) Fulfilling ACO Activities identified in this Agreement. 2. If the ACO was formed by two or more Next Generation Participants, the ACO shall be a legal entity separate from the legal entity of any of its Next Generation Participants or Preferred Providers. 3. If the ACO was formed by a single Next Generation Participant, the ACO s legal entity and governing body may be the same as that of the Next Generation Participant if the ACO satisfies the requirements of Section III.B. 4. The ACO is deemed to satisfy the requirements of Sections III.A.1 and III.A.2 if, as of the Effective Date, it was a Pioneer ACO pursuant to a Pioneer ACO Model Innovation Agreement or a Medicare Shared Savings Program ( MSSP ) ACO pursuant to a participation agreement (as defined at 42 C.F.R. 425.20). 5. During the term of this Agreement, the ACO shall not participate in the MSSP, the independence at home medical practice pilot program under section 1866E of the Act, another model tested or expanded under section 1115A of the Act that involves shared savings, or any other Medicare initiative that involves shared savings. 12
B. ACO Governance 1. General (a) The ACO shall maintain an identifiable governing body with sole and exclusive authority to execute the functions of the ACO and make final decisions on behalf of the ACO. The ACO shall have a governing body that satisfies the following criteria: i. The governing body has responsibility for oversight and strategic direction of the ACO and is responsible for holding ACO management accountable for the ACO's activities; ii. The governing body is separate and unique to the ACO, except as permitted under section III.A.3; iii. The governing body has a transparent governing process; iv. When acting as a member of the governing body of the ACO, each governing body member has a fiduciary duty to the ACO, including the duty of loyalty, and shall act consistent with that fiduciary duty; and v. The governing body shall receive regular reports from the designated compliance official of the ACO that satisfies the requirements of XVII.A.1. (b) The ACO shall provide each member of the governing body with a copy of the Agreement and any amendments thereto. 2. Composition and Control of the Governing Body (a) The ACO governing body shall include at least one Beneficiary served by the ACO who: i. Does not have a conflict of interest with the ACO; ii. Has no immediate family member with a conflict of interest with the ACO; iii. Is not a Next Generation Participant or Preferred Provider; and iv. Does not have a direct or indirect financial relationship with the ACO, a Next Generation Participant, or a Preferred Provider, except that such person may be reasonably compensated by the ACO for his or her duties as a member of the governing body of the ACO. (b) The ACO governing body shall include at least one person with training or professional experience in advocating for the rights of consumers ( Consumer Advocate ), who may be the same person as the Beneficiary and who: i. Does not have a conflict of interest with the ACO; ii. Has no immediate family member with a conflict of interest with the ACO; 13
iii. Is not a Next Generation Participant or Preferred Provider; and iv. Does not have a direct or indirect financial relationship with the ACO, a Next Generation Participant, or a Preferred Provider, except that such person may be reasonably compensated by the ACO for his or her duties as a member of the governing body of the ACO. (c) The ACO Governing body shall not include a Prohibited Participant, or an owner, employee or agent of a Prohibited Participant. (d) If Beneficiary and/or consumer advocate representation on the ACO governing body is prohibited by state law, the ACO shall notify CMS and request CMS approval of an alternative mechanism to ensure that its policies and procedures reflect consumer and patient perspectives. CMS shall use reasonable efforts to approve or deny the request within 30 days. (e) The governing body members may serve in similar or complementary roles or positions for Next Generation Participants or Preferred Providers. (f) At least 75 percent control of the ACO's governing body shall be held by Next Generation Participants or their designated representatives. The Beneficiary and consumer advocate required under this Section shall not be included in either the numerator or the denominator when calculating the percent control. 3. Conflict of Interest The ACO shall have a conflict of interest policy that applies to members of the governing body and satisfies the following criteria: (a) Requires each member of the governing body to disclose relevant financial interests; (b) Provides a procedure to determine whether a conflict of interest exists and set forth a process to address any conflicts that arise; and (c) Addresses remedial actions for members of the governing body that fail to comply with the policy. C. ACO Leadership and Management 1. The ACO s operations shall be managed by an executive, officer, manager, general partner, or similar party whose appointment and removal are under the control of the ACO s governing body and whose leadership team has demonstrated the ability to influence or direct clinical practice to improve the efficiency of processes and outcomes. 2. Clinical management and oversight shall be managed by a senior-level medical director who is: (a) A Next Generation Participant; (b) Physically present on a regular basis at any clinic, office, or other location participating in the ACO; and 14
(c) A board-certified physician and licensed in a state in which the ACO operates. D. ACO Financial Arrangements 1. The ACO shall not condition a Next Generation Participant s or Preferred Provider s participation in the Model, directly or indirectly, on referrals of items or services provided to Beneficiaries who are not aligned to the ACO. 2. The ACO shall not require that Next Generation Beneficiaries be referred only to Next Generation Participants or Preferred Providers or to any other provider or supplier. This prohibition shall not apply to referrals made by employees or contractors who are operating within the scope of their employment or contractual arrangement with the employer or contracting entity, provided that the employees and contractors remain free to make referrals without restriction or limitation if a Next Generation Beneficiary expresses a preference for a different provider or supplier, or the referral is not in the Next Generation Beneficiary's best medical interests in the judgment of the referring party. 3. The ACO shall not condition the eligibility of an individual or entity to be a Next Generation Participant or Preferred Provider on the individual s or entity s offer or payment of cash or other remuneration to the ACO or any other individual or entity. 4. The ACO, its Next Generation Participants, and/or Preferred Providers shall not take any action to limit the ability of a Next Generation Participant or Preferred Provider to make decisions in the best interests of the Beneficiary, including the selection of devices, supplies and treatments used in the care of the Beneficiary. 5. The ACO shall notify CMS within 15 days after becoming aware that any Next Generation Participant or Preferred Provider is under investigation or has been sanctioned by the Government or any licensing authority (including, without limitation, the imposition of program exclusion, debarment, civil monetary penalties, corrective action plans, and revocation of Medicare billing privileges). If a Next Generation Participant or Preferred Provider is under investigation or has been sanctioned but not excluded from Medicare program participation, CMS may take any of the actions set forth in Section XIX. 6. By the date specified in Section III.D.7, below, the ACO shall have a written agreement with each of the individuals and entities that are approved by CMS to be Next Generation Participants or Preferred Providers that complies with the following criteria: (a) The only parties to the agreement are the ACO and the Next Generation Participant or Preferred Provider. (b) The agreement requires the Next Generation Participant or Preferred Provider to agree to participate in the Model, to engage in ACO Activities, to comply with the applicable terms of the Model as set forth in this Agreement, and to comply with all applicable laws and regulations (including, but not limited to, those specified at Section XVII.D). The ACO shall provide each Next Generation Participant and Preferred Provider with a copy of this Agreement. 15
(c) The agreement expressly sets forth the Next Generation Participant s or Preferred Provider s obligation to comply with the applicable terms of this Agreement, including provisions regarding the following: participant exclusivity, quality measure reporting, and continuous care improvement objectives for Next Generation Participants; Voluntary Alignment; Beneficiary freedom of choice; Benefit Enhancements; the Coordinated Care Reward; participation in evaluation, shared learning, monitoring, and oversight activities; the ACO compliance plan; and audit and record retention requirements. (d) The agreement requires the Next Generation Participant or Preferred Provider to update its Medicare enrollment information (including the addition and deletion of Next Generation Professionals that have reassigned to the Next Generation Participant or Preferred Provider their right to Medicare payment) on a timely basis in accordance with Medicare program requirements. (e) The agreement requires the Next Generation Participant or Preferred Provider to notify the ACO of any changes to its Medicare enrollment information within 30 days after the change. (f) The agreement requires the Next Generation Participant or Preferred Provider to notify the ACO within seven days of becoming aware that it is under investigation or has been sanctioned by the Government or any licensing authority (including, without limitation, the imposition of program exclusion, debarment, civil monetary penalties, corrective action plans, and revocation of Medicare billing privileges). (g) The agreement permits the ACO to take remedial action against the Next Generation Participant or Preferred Provider (including the imposition of a corrective action plan, denial of incentive payments such as Shared Savings distributions, and termination of the ACO s agreement with the Next Generation Participant or Preferred Provider) to address noncompliance with the terms of the Model or program integrity issues identified by CMS. (h) The agreement is for a term of at least one year, but permits early termination if CMS requires the ACO to remove the Next Generation Participant or Preferred Provider pursuant to Section XIX.A.1. (i) The agreement requires the Next Generation Participant to complete a closeout process upon termination or expiration of the agreement that requires the Next Generation Participant to furnish all quality measure reporting data. 7. The ACO shall have fully executed written agreements in place that meet the requirements set forth in Section III.D.6 by the following dates: (a) By the Start Date in the case of agreements with individuals and entities that were approved by CMS before the Start Date to be Next Generation Participants. (b) By the Start Date in the case of agreements with individuals or entities approved by CMS before the Start Date to be Preferred Providers on the list 16
specified in Section IV.C.4, or by February 1, 2016 in the case of an ACO that elected to defer participation of Preferred Providers until February 1, 2016. If the ACO elected to defer participation of Preferred Providers, none of the individuals or entities approved by CMS to be Preferred Providers and identified on the list specified in Section IV.C.4 may participate in the Model until February 1, 2016. If the ACO has elected such deferral, it must, by no later than the Start Date of the Model, notify each individual or entity on the list identified in Section IV.C.4 that the ACO has elected to defer participation of Preferred Providers and that the ACO s Preferred Providers will begin participation on February 1, 2016, regardless of when the written agreement is signed. (c) By the date the ACO certifies its Participant List and Preferred Provider List in accordance with Section IV.E in the case of agreements with individuals and entities approved by CMS to be Next Generation Participants and Preferred Providers effective on the first day of the second or any subsequent Performance Year. (d) For agreements with individuals or entities approved by CMS to be Next Generation Participants or Preferred Providers effective on a day other than the first day of a Performance Year, by the date the ACO requests the addition of the individual or entity to the Participant List or Preferred Provider List. 8. The ACO shall not distribute Shared Savings to any Next Generation Participant or Preferred Provider that has been terminated pursuant to Section XIX.A.1. 9. CMS provides no opinion on the legality of any contractual or financial arrangement that the ACO, a Next Generation Participant, or a Preferred Provider has proposed, implemented, or documented. The receipt by CMS of any such documents in the course of the application process or otherwise shall not be construed as a waiver or modification of any applicable laws, rules or regulations, and will not preclude CMS, HHS or its Office of Inspector General, a law enforcement agency, or any other federal or state agency from enforcing any and all applicable laws, rules and regulations. IV. Next Generation Participants and Preferred Providers A. General 1. Next Generation Participants and Preferred Providers will be included on the Participant List or Preferred Provider List only upon the prior written approval of CMS. 2. CMS shall maintain the Participant List and Preferred Provider List in a manner that permits the ACO to review the list. 3. The ACO shall maintain current and historical Participant Lists and Preferred Provider Lists in accordance with Section XVIII. 4. CMS may periodically monitor the program integrity history of an ACO s Next Generation Participants or Preferred Providers. CMS may remove an individual or 17
entity from the Participant List or Preferred Provider List, or subject the ACO to additional monitoring on the basis of the results of a periodic program integrity screening or information obtained regarding an individual s or entity s history of program integrity issues. CMS shall notify the ACO if it chooses to remove an individual or entity from the Participant List or Preferred Provider List, and such notice shall specify the effective date of removal. B. Initial Next Generation Participant List 1. The parties acknowledge that the ACO submitted to CMS a proposed list of Next Generation Participants, identified by name, NPI, TIN, Legacy TIN (if applicable), and CCN (if applicable). 2. CMS states that it has reviewed the proposed list of Next Generation Participants and conducted a program integrity screening on the proposed Next Generation Participants. 3. CMS states that it has submitted to the ACO a list of individuals and entities that it approved to be Next Generation Participants. The ACO states that it reviewed the list and made any necessary corrections to it, including the removal of any individuals or entities that have not agreed to participate in the Model as of the Start Date pursuant to a written agreement. 4. The ACO states that it has submitted to CMS an initial Participant List that the ACO has certified is a true, accurate and complete list identifying all of the ACO s Next Generation Participants approved by CMS to participate in the Model as of the Start Date and with whom the ACO will have a fully executed written agreement meeting the requirements in Section III.D.6. The ACO further states that the initial Participant List specifies which Next Generation Participants, if any, have agreed to receive a PBP Fee Reduction, and designates the Benefit Enhancements, if any, in which each Next Generation Participant has agreed to participate. 5. The ACO shall update the initial Participant List in accordance with Sections IV.D and IV.E. C. Initial Preferred Provider List 1. The parties acknowledge that the ACO submitted to CMS a proposed list of Preferred Providers identified by name, NPI, TIN, Legacy TIN (if applicable), and CCN (if applicable), and the Benefit Enhancements, if any, in which each individual or entity had agreed to participate. 2. CMS states that it has reviewed the proposed list of Preferred Providers and conducted a program integrity screening on the proposed Preferred Providers. 3. CMS states that it has submitted to the ACO a list of individuals and entities that it has approved to be Preferred Providers. The ACO states that it has reviewed the list and made any necessary corrections to it, including the removal of any individuals or entities that have not agreed to participate in the Model. 18
4. The ACO states that it has submitted to CMS an initial Preferred Provider List that the ACO has certified is a true, accurate and complete list identifying all of the ACO s Preferred Providers approved by CMS to participate in the Model as of the date specified in Section III.D.7.b.i, and with whom the ACO will have, by the date specified in Section III.D.7.b.i, a fully executed written agreement meeting the requirements in Section III.D.6. The ACO further states that the initial Preferred Provider List specifies the Benefit Enhancements, if any, in which each Preferred Provider has agreed to participate. 5. The ACO shall update the initial Preferred Provider List in accordance with Sections IV.D and IV.E. D. Updating Lists During the Performance Year 1. Additions to a List (a) Additions to the Participant List for the 2016 Performance Year. For the Performance Year that begins January 1, 2016, the ACO shall not request the addition of a Next Generation Participant to take effect on a date other than the first day of a Performance Year ( during the Performance Year ). (b) Additions to the Participant List for Subsequent Performance Years. Beginning with the Performance Year that begins January 1, 2017, the ACO shall not add a Next Generation Participant without prior written approval from CMS. If the ACO wishes to add an individual or entity to the Participant List effective on a date during a Performance Year, it shall submit a request to CMS in a form and manner specified by CMS. CMS may accept requests for additions to take effect during the Performance Year only under the following circumstances: i. The request for addition is submitted to CMS by July 31 of the Performance Year in which the addition would take effect; ii. iii. iv. In the case of a request to add an individual to a Participant List, the ACO certifies that the individual (1) currently bills for items and services he or she furnishes to Beneficiaries under a Medicare billing number assigned to the TIN of an entity that is a Next Generation Participant, and (2) did not bill for such services under the TIN of the same Next Generation Participant at the time the ACO submitted its most recent Proposed Participant List pursuant to Section IV.E.1; The ACO certifies that it has a fully executed written agreement with the individual or entity it wishes to add to the Participant List and that the agreement meets the requirements of Section III.D.6; and The ACO certifies that it has given notice to each Next Generation Participant that is a physician or non-physician practitioner and the TIN through which such individual bills Medicare that the individual has been added to the ACO s Participant List. 19
CMS may reject the request on the basis that the individual or entity fails to satisfy the requirements of paragraph (A) or paragraphs (C) through (F) of the definition of Next Generation Participant, or on the basis of information obtained from a program integrity screening. If CMS approves the request, the individual or entity will be added to the Participant List effective on the date the addition is approved by CMS. (c) Preferred Provider List Additions. The ACO shall not add an individual or entity to the Preferred Provider List during a Performance Year without prior written approval from CMS. If the ACO wishes to add an individual or entity to the Preferred Provider List during a Performance Year, it shall submit a request to CMS in the form and manner and by a deadline specified by CMS. In Performance Year 2017 and subsequent Performance Years, CMS may accept requests for additions to take effect during the Performance Year only under the following circumstances: i. The ACO certifies that is has a fully executed written agreement with the individual or entity it wishes to add to the Preferred Provider List and that the agreement meets the requirements of Section III.D.6; and ii. The ACO certifies that it has furnished a written notice to the executive of each entity identified in the request for addition through whose TIN a Preferred Provider bills Medicare. The notice must identify by name and NPI each individual who is identified on the request for addition as billing through the entity s TIN. CMS may reject the request on the basis that the individual or entity fails to satisfy the requirements of paragraph (A) and paragraphs (C) through (F) of the definition of Preferred Provider, or on the basis of information obtained from a program integrity screening. If CMS approves the request, the individual or entity will be added to the Preferred Provider List effective on the date the addition is approved by CMS. 2. Removals from a List In a form and manner specified by CMS, the ACO shall notify CMS no later than 30 days after an individual or entity has ceased to be a Next Generation Participant or Preferred Provider and shall include in the notice the date on which the individual or entity ceased to be a Next Generation Participant or Preferred Provider. The removal of the individual or entity from the Participant List or Preferred Provider List will be effective on the date the individual or entity ceased to be a Participant or Preferred Provider. An individual or entity ceases to be a Next Generation Participant or Preferred Provider when it is no longer a Medicare-enrolled provider or supplier, when its agreement with the ACO to participate in the Model terminates, or when it ceases to bill for items and services to Beneficiaries under a Medicare billing number assigned to a TIN in accordance with applicable Medicare regulations. 20
3. Updating Enrollment Information The ACO shall ensure that all changes to enrollment information for Next Generation Participants and Preferred Providers, including changes to reassignment of the right to receive Medicare payment, are reported to CMS consistent with 42 C.F.R. 424.516. E. Annual Updates to Participant List and Preferred Provider List 1. Proposed Participant and Preferred Provider Lists Prior to the second and subsequent Performance Years, the ACO shall submit to CMS by a date and in a manner specified by CMS proposed lists identifying each individual or entity that the ACO expects to participate in the Model as a Next Generation Participant or Preferred Provider effective at the start of the next Performance Year ( Proposed Participant List and Proposed Preferred Provider List, respectively). CMS shall specify a submission deadline for the Proposed Participant List that is no later than 165 days before the start of the next Performance Year. CMS shall specify a submission deadline for the Proposed Preferred Provider List that is not later than 45 days before the start of the next Performance Year. The Proposed Participant List must identify each individual or entity by name, NPI, TIN, Legacy TIN (if applicable), and CCN (if applicable). The Proposed Preferred Provider List must identify each individual or entity by name, NPI, TIN, Legacy TIN (if applicable), and CCN (if applicable), and any PBP Fee Reduction, AIPBP Fee Reduction (if applicable) and participation in any Benefit Enhancements (if applicable). The ACO shall certify that the Proposed Preferred Provider List is a true, accurate, and complete list of individuals and entities that have agreed to be Preferred Providers, subject to CMS approval, effective January 1 of the relevant Performance Year. 2. ACO Notice to Proposed Participants At least 14 days prior to submitting its Proposed Participant List to CMS, the ACO shall furnish written notification to each individual or entity it wishes to include on the Proposed Participant List. Such notice shall (a) State that the individual or entity and any relevant TINs through which it bills Medicare will be identified on the Proposed Participant List; and (b) State that participation in the Model may preclude the individual or entity from participating in the MSSP, another Medicare ACO or other payment model tested or expanded under section 1115A of the Act, or any other Medicare initiative that involves shared savings. 3. ACO Notice to TINs At least 30 days prior to submitting its Proposed Participant List and Proposed Preferred Provider List to CMS, the ACO shall furnish written notification to the executive of any TIN through which an individual on the Proposed Participant List or Proposed Preferred Provider List bills Medicare. Such notification must: 21
(a) Identify by name and NPI any individual associated with the TIN that will be identified on the ACO s Proposed Participant List or Proposed Preferred Provider List; and (b) Inform the entity that a Next Generation Participant s participation in the ACO may preclude the entire TIN from receiving payment adjustments through the value-based payment modifier under section 1848(p) of the Act and from participating in the MSSP. 4. Review, Certification, and Finalization of the Participant List and Preferred Provider List (a) With respect to each individual and entity identified on the Proposed Participant List and Proposed Preferred Provider List, CMS shall conduct a program integrity screening, including a review of the individual s or entity s history of Medicare program exclusions, current or prior law enforcement investigations, or other sanctions and affiliations with individuals or entities that have a history of program integrity issues. (b) CMS may reject any individual or entity on a Proposed Participant List or a Proposed Preferred Provider List on the basis of the results of a program integrity screening, history of program integrity issues, or: i. may reject any individual or entity on a Proposed Participant List if it determines that the individual or entity does not satisfy the criteria in paragraph (A) or paragraphs (C) through (E) of the definition of Next Generation Participant ; or ii. may reject any individual or entity on a Proposed Preferred Provider List if it determines that the individual or entity does not satisfy the criteria in paragraph (A) or paragraphs (C) through (F) of the definition of Preferred Provider. (c) No later than 115 days before the start of the next Performance Year, CMS shall send the ACO a preliminary list of individuals and entities that CMS has tentatively approved to be Next Generation Participants effective at the start of the next Performance Year. (d) No later than 90 days before the start of the next Performance Year, the ACO shall, after a review of the list of tentatively approved Next Generation Participants, submit a revised Participant List with any necessary corrections, including the removal of any individuals or entities that have not agreed to participate in the Model pursuant to a written agreement with the ACO, or that are otherwise ineligible to participate. No additions to the list are permitted at this time. The ACO shall certify that the submitted list is a true, accurate, and complete list of the individuals and entities that have agreed to be Next Generation Participants effective January 1 of the relevant Performance Year. (e) No later than 60 days before the start of the next Performance Year, CMS shall send the ACO a list of individuals and entities that CMS has approved to be Next Generation Participants effective at the start of the next Performance 22